An Appealable Discovery Order

Most parties faced with an adverse discovery ruling have to grin and bear it.  Discovery orders are not generally appealable, and a writ petition is such a longshot that unless the ruling threatens a trade secret or similarly sensitive confidential information, the writ petition hardly seems worthwhile.  In H.B. Fuller Co. v Doe, case no. H030099 (May 31, 2007), California’s Sixth District Court of Appeal reminds us of a rare occasion when a discovery order is appealable. 

Doe sought to quash a subpoena directed to an internet company.  The subpoena sought information that would identify the person (Doe) who posted Fuller’s confidential company information on internet message boards.  No lawsuit was pending in California, and Doe’s identity was apparently necessary before Fuller could commence suit in its home state of Minnesota.

In a decision limited to Doe’s motion to unseal the record and briefs on appeal, the court first addressed the issue of appealability.  It found this discovery order was appealable because “the order is ancillary to litigation in another jurisdiction and operates as the last word by a California trial court on the matters at issue.”  Thus, even though the court could readily have chosen to construe the appeal as a writ petition, it found it unnecessary to do so.

This is a great case to remember.  Dire circumstances justifying writ review won’t always be present when a client gets hit with an unfavorable discovery order arising from litigation in another jurisdiction.  Being able to appeal greatly expands the cases in which review may be invoked.

Claiborne Case Sparks Debate

In Claiborne v. U.S., case no. No. 06–5618 (June 4, 2007), the U.S. Supreme Court decided that the death of the petitioning criminal defendant rendered the case moot, and thus it vacated the judgment of the Eighth Circuit Court of Appeals that had reversed the district court’s downward adjustment from the federal sentencing guidelines.  The order itself tells you nothing about the case, so I suggest you start with Kimberly A. Kralowec at The Appellate Practitioner, who provides a brief rundown, from which it makes sense next to check this SCOTUSBlog post from before the ruling, describing efforts by a similarly situated petitioner to save the Claiborne case despite its technical mootness.

Columbia law professor Michael Dorf uses the Claiborne case as a starting point for a short Findlaw article on the wider subject of the role of the Supreme Court and tensions in justiciability doctrine, A Mootness Dismissal Illustrates the Supreme Court’s Split Personality: Is it a Constitutional Court or a Court of Error?  The article describes the underlying issue in Claiborne, examines whether other rules might have saved the Claiborne case, argues that the Supreme Court should not be subject to the same strict justiciability standards of lower federal courts, and compares the more liberal justiciability standards of courts of last resort in some other countries.  All this in a very readable 1900 or so words.

Appellate Jurisdiction: Order Denying Motion to Vacate

An order denying a motion to vacate usually isn’t appealable unless the motion is a statutory motion under Code of Civil Procedure section 663.  But in Carr v. Kamins, case no. B191247 (May 31, 2007), the California Court of Appeal reminds us of an exception.

The plaintiff in this adverse possession suit served the defendants by publication, after which default and default judgment were entered.  Four years later, one of the defendants later moved to vacate the default judgment on the ground that plaintiff committed fraud in procuring the order for service by publication and that the default judgment was obtained in violation of her right to due process.  The trial court denied the motion, and defendant appealed.

The court rejected the plaintiff’s contention that the order was not appealable.  The reason: the order gave effect to a void judgment, and any order doing so is itself void and appealable as a special order after judgment under Code of Civil Procedure section 904.1, subd. (a)(2), even if no appeal is taken from the underlying judgment.

Some Appellate Law Reminders Coming Up

Last week saw several published decisions with good discussions of appellate procedure and jurisdiction.  The most in-depth is the Ninth Circuit case I blogged about here, but there are several California decisions to note.  I finally got a chance to catch up on some of them over the weekend, and will post about them in the next few days. (They ought to remain good law for at least that long!) They are great reminders of some lesser-known rules applicable in unusual situations.

Ninth Circuit Panel Splits on Appellate Jurisdiction over Denial of FSIA Immunity Claimed via Res Judicata

The Ninth Circuit tackles a question of appellate jurisdiction in Gupta v. Thai Airways International, case no. 04-56389 (May 30, 2007).  The riddle — which the majority overlooks until it responds to the dissent — arises from the intersection of res judicata and the “collateral order” exception to the final judgment rule.

Thai Airways contended in its motion to dismiss for lack of subject matter jurisdiction in the district court that it was immune from suit under the Foreign Sovereign Immunities Act (the airline is 76% owned by the Thai government) .  The airline contended that an identical state court action brought by Gupta was res judicata on this issue because it was dismissed for lack of subject matter jurisdiction on FSIA immunity grounds.  It also argued the merits of FSIA immunity independently of its res judicata argument.  The district court rejected both arguments, finding that the prior ruling was not res judicata because it did not go to the merits of the dispute and that an exception to the FSIA applied.

On appeal, however, the airline did not assert the district court erred in its determination that an exception to the FSIA applied.  It relied exclusively on its res judicata argument. 

This turns out to be what splits the dissent from the majority on appeal.

The Ninth Circuit (and its sister circuits) have long recognized the appealability of an order denying a motion to dismiss based on FSIA immunity.  The majority classifies this as such an appeal, and thus asserts jurisdiction under this well-established exception to the final judgment rule.

The issue becomes thornier when you read the dissent, in which Judge Tashima argues that the court must examine “each claim or issue presented separately to determine their jurisdiction on interlocutory appeal.”  Conceding that he would find jurisdiction over the issue of whether the district court erred in finding that the FSIA exception applied, Judge Tashima contends that the res judicata issue is sufficiently distinct to take it outside the rule allowing review of orders denying FSIA immunity:

While it is true that our case law permits an immediate interlocutory appeal from an order denying a motion to dismiss based on foreign sovereign immunity, it is equally well-settled that the denial of a motion to dismiss based on res judicata grounds is not immediately appealable.

***

Although the cases discussing the collateral order doctrine sometimes loosely refer to interlocutory orders as being appealable, in fact, the cases actually analyze the specific claim or issue presented in determining the scope of their jurisdiction on an interlocutory appeal. And each claim presented must independently meet the requirements of the collateral order doctrine in order for it to be considered on interlocutory appeal. Appellate jurisdiction over one claim rejected in a district court order does not confer jurisdiction over all other claims rejected in the same order.(Citations omitted, emphasis in original.)

It seems clear that had the airline appealed on both grounds, Judge Tashima would assert jurisdiction over the merits of the FSIA immunity claim but not over the res judicata argument for the same claim of immunity. 

This is too much hair-splitting for the majority, which responds in a footnote to its statement that “It is from this order that Thai Airways is appealing.”  (Emphasis in original.) The majority contends that the dissent relies on a false premise that the FSIA immunity issue and res judicata issues are distinct.  It says that since the res judicata issue involves and is based solely on FSIA immunity, and is indeed determinative on the issue, the appeal falls within the rule of appealability under the collateral order doctrine for orders denying FSIA immunity.

Whatever the asserted ground of error, the majority has a point that in the end, the order appealed from determined that there was no FSIA immunity.  And that is all they needed to bring it within the well-established exception to the final judgment rule.

Ninth Circuit Takes Appellate Jurisdiction over Pretrial Stay Orders

A whole lot of insurance companies sue a whole lot of doctors and clinics. The insurers allege that the defendants gave away cash and vacation packages to lure patients into undergoing unnecessary procedures, for which defendants billed the plaintiff insurers, who paid millions on the claims. Several individual defendants are also facing criminal prosecution and move to stay the civil proceedings because discovery would implicate their Fifth Amendment rights. The clinics say they can’t put on an adequate defense if the action is stayed only as to the individuals facing prosecution, so they, too, ask for a stay of the proceedings. The district court obliges the stay requests — apparently in multiple orders, as the plaintiff insurers take three appeals and one writ petition from the same underlying case. Blue Cross and Blue Shield v. Rubin, case no. 05-56261 (May 25, 2007).

The Ninth Circuit holds it has appellate jurisdiction notwithstanding the lack of a final judgment because the stay orders, all of which are indefinite in duration and could last for years, place the plaintiff insurers “effectively out of court.” In doing so, the Ninth joins a majority of other circuits finding appellate jurisdiction in such circumstances, and explains that the indefinite delay poses threats of “denying justice by delay,” lost evidence and faded witness recollections, and irreparable harm to the business plaintiffs, including the risk of going out of business in the interim.

A second lesson for counsel lies in the decision on the merits. The court neither affirms nor reverses, but vacates the stay orders and remands for further consideration by the district court because there is an inadequate record to review the court’s exercise of discretion.

Election Contest Not Appropriate for Writ Review

In Nguyen v. Superior Court, case no. G038475 (May 14, 2007), the California Court of Appeal, Fourth District, holds that a losing candidate’s challenge to a ballot recount that reversed the results of a board of supervisors election “should be heard by the more deliberative and thorough process of appeal, rather than the hastier route of a petition of writ of mandate,” but leaves open the possibility of writ review in other election challenges.  In part, the court denies the writ because due deliberation and the procedural safeguards of appeal are especially important in a case that may result in the removal of an elected official that has already been sworn in to office.  But the court also evaluates the classic factors for determining the appropriateness of writ review (see Omaha Indemnity Co. v. Superior Court (1989) 209 Cal.App.3d 1266) — at least, those that it finds applicable to a petition brought after trial, when appeal is readily available.  Since the legislature had specifically provided for relief by way of appeal (Elections Code section 16900) and expedited that relief by giving election cases preference on appeal (Code of Civil Procedure section 44), , the court finds that the petitioner has an adequate remedy by way of appeal.  In the absence of any constitutional question, conflict in trial court decisions, or impending elections that might be affected by the statewide ramifications of an ultimate ruling, the court holds that writ review is inappropriate in this case.

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